What is REIT?

REITs can be easily understood as a fund based trust that owns income-producing real estate, buys real estate-at market value, develops, manage/operates and sells real estate assets. Modeled after mutual funds, REITs typically pay out all of their taxable income as dividends to shareholders. In turn, shareholders pay the income taxes on those dividends. Their units are traded at the stock exchange and its portfolio is based on real estate assets. Regulatory framework for REITs was introduced by Securities & Exchange Commission of Pakistan ‘SECP’ in 2008 and subsequently it was revamped and replaced in 2015.